It is the intent of the legislature to enhance the budget development process by improving the information available for the governor and legislature when evaluating the budget requests of state agencies and for the legislature when evaluating the governor's budget proposal under RCW 43.88.030. The legislature establishes the zero-based review process in section 2 of this act to provide more thorough analysis of the programs and services provided by state agencies and to better prioritize the expenditure of public resources. The zero-based budget review process focuses on nonentitlement programs; mandatory entitlement programs receive a de facto zero-based budget review through regular caseload forecasts under chapter 43.88C RCW and per capita cost analysis.
This section adds a new section to an existing chapter 43.88. Here is the modified chapter for context.
As used in this section unless the context clearly requires otherwise:
"Agency activity" means major activities of state agencies pursuant to RCW 43.88.090 and described in the office of financial management's agency activity inventory for the appropriate biennium.
"Program" means a service or a group of services designed to accomplish a specific public goal and result in specific public benefits except for those entitlement services listed in the definition of "caseload" under RCW 43.88C.010 (7) and (10). For the zero-based budget review under this section, a program is any distinguishable service or unit that makes up an agency activity. In most cases, an agency activity will encompass several programs, although in some cases the agency activity could be one program.
"Zero-based budget review" means:
Information and analysis regarding an agency's programs prepared by the agency as required by subsection (3) of this section that must be included as a separate document in an agency's biennial budget request under this chapter; and
Consideration of the information provided under (c)(i) of this subsection by the governor and the legislature during the budget development process.
Beginning in 2022 and in each even-numbered year thereafter, the legislature must specify, in the omnibus operating appropriations act or in other legislation, programs for which agencies must perform a zero-based budget review under subsection (3) of this section. It is the intent of the legislature that twenty percent of all state programs be subject to a zero-based budget review each biennium, so that every program receives a zero-based budget review within a ten-year cycle. When selecting programs for review, the legislature may specify programs by functional area, such as education, health care, other human services, natural resources, and general government, or may specify programs as prioritized by the legislature. When selecting programs for a zero-based budget review for a particular biennium, the legislature may broaden or narrow the definition of program for specific agencies.
Beginning with biennial budget requests for the 2023-2025 fiscal biennium and with each biennial budget request thereafter, agencies must submit zero-based budget reviews for the programs identified by the legislature for review that biennium under subsection (2) of this section. Information and analysis submitted by agencies for the zero-based review under this section shall include:
A statement of the statutory basis or other basis for the creation of each program and the history of each program that is being reviewed;
A description of how each program fits within the strategic plan and goals of the agency and an analysis of the quantified objectives of each program within the agency;
Any available performance measures indicating the effectiveness and efficiency of each program;
A description with supporting cost and staffing data of each program and the populations served by each program, and the level of funding and staff required to accomplish the goals of the program if different than the actual maintenance level;
An analysis of the major costs and benefits of operating each program and the rationale for specific expenditure and staffing levels;
An analysis estimating each program's administrative and other overhead costs;
An analysis of the levels of services provided;
Where applicable, an analysis estimating the amount of funds or benefits that actually reach the intended recipients; and
Other information and analysis requested by the legislature in the legislation identifying the agency programs for review under subsection (2) of this section.
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The governor and legislature shall consider the information and analysis provided by agencies under this section in the budget development process. The house of representatives appropriations committee and the senate ways and means committee shall hold at least one public hearing on the information and analysis submitted by agencies under the zero-based budget review.
The information and analysis submitted by agencies under the zero-based budget review process must be filed electronically with the state's fiscal website managed by the legislative evaluation and accountability program committee.